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Federal systems of government such as Australia’s are modern political devices for achieving unity between diverse political communities. Inevitably, intergovernmental relations between the tiers of government in federations are fraught with tensions over the ways in which power and responsibility are shared between them. Globalisation has added to such internal pressures on federations as complex, often entrenched ‘trans-boundary’ policy issues and the pressing needs of local and regional communities. This unit explores the case for reform of the Australian federation in the light of the democratic values and purposes it was supposed to embody. In exploring this case, we also take note of the experiences of other countries.